Following the resignation of Qantas chief executive Alan Joyce, fresh details have emerged regarding his relationship with government. By Rick Morton.
Exclusive: Joyce sought to sell government a stake in Qantas
In late 2010, amid collapsing revenues and shrinking profits, Qantas’s then fledgling chief executive, Alan Joyce, asked the Gillard government to buy a stake in the airline.
Merger talks between Qantas and British Airways, which were held in response to the global financial crisis, had broken down and Joyce became desperate for cash. The company had an inkling its investment rating was on the brink of downgrade. Joyce met with then prime minister Julia Gillard and then treasurer Wayne Swan to put forward his proposition. Neither gave serious consideration to the request. Qantas denies the offer was made.
“He wanted the Australian government to buy an equity stake in Qantas. It was that simple,” a person familiar with the discussion tells The Saturday Paper.
“Joyce made it clear he wanted the investment, access to cheap money, all that sort of thing. But the implication was also that the government would have a vested interest and if things go wrong, they were going to share it.”
These failed conversations frame Joyce’s decision, the following year, to ground the entire fleet without warning the prime minister or the treasurer. It was the end of Alan Joyce the charmer.
“He’s pleasant, but he’s a junkyard dog,” one senior government minister says of Joyce. “You know, he’s a tough fucker.”
After Labor lost the 2013 election, Joyce approached the new Abbott government for support, asking for a debt guarantee or line of credit when the carrier’s investment rating was downgraded. Cabinet discussed this but declined.
Instead, Tony Abbott’s government attempted to water down the most restrictive section of the Qantas Sale Act but couldn’t move anything significant beyond the Senate.
Foreign ownership caps remained at 49 per cent. To stem the losses, and eventually return to profit, Joyce had to become even more cunning and brutal. His reign became defined by the hoarding of so-called flight slots at Sydney Airport, outsourcing Qantas jobs to a constellation of external companies or separate entities with worse pay and conditions, and cutting service standards.
“At the end of the day he is a corporate schemer,” another senior source familiar with Joyce’s leadership says.
“And what he wants is money. It’s the story of his time at Qantas, begging for money or guarantees or extra support. More so than any other company executive in the country, he was obsessed with the stuff.”
This week, Joyce ended his 15-year term as Qantas chief executive, bringing forward his retirement by two months. He leaves behind the largest consumer watchdog investigation in Australian history, with a case currently before the Federal Court. When the news was announced, airline staff cheered the departure over in-flight announcements.
Prime Minister Anthony Albanese and his transport minister, Catherine King, are facing allegations of political favouritism. Questions are also being asked of the Qantas board.
In a statement released on Tuesday, Joyce said he was proud of his work at the airline. He said it was in a strong position and had a bright future but that the best thing he could do was hand over to a new chief executive, Vanessa Hudson. “In the last few weeks, the focus on Qantas and events of the past make it clear to me that the company needs to move ahead with its renewal as a priority,” he said.
The script was meant to go somewhat differently. On May 2, the Qantas Group announced Alan Joyce would retire in six months. The company was in the middle of a $1 billion share buyback, ahead of an additional $500 million program that begins on Monday. When Joyce decided to sell 2.5 million of his own shares, he did so at a $6.75 premium, or almost $17 million for the lot. Soon after he announced the largest profit on record for the carrier: $2.47 billion before tax.
But for perhaps the first time in his career, Joyce seriously underestimated the strength of community anger over the airline’s behaviour. After years of cutbacks, the airline was hit more severely by Covid-19 and became the most complained about business in Australia. Thousands upon thousands of flights were cancelled in a three-month period last year. Customers were parted with baggage for days at a time. Others couldn’t even access refunds for the flights they had paid for but had never been able to board. Against this backdrop Qantas received more than $2 billion in government assistance through the pandemic, almost half of which came in the form of JobKeeper. Despite this, the airline sacked 1700 baggage handlers.
“You know, Albo has been too close to him in the past,” a senior Labor figure says of Joyce.
“But having said that, it was the previous Coalition government that gave them fucking JobKeeper. The taxpayers have underwritten their profits.
“With them keeping that money when they didn’t need it, the taxpayer under the previous government has redistributed income upwards to the richest people in Australia. It’s a shocking joke.”
The latest Qantas troubles began with outrage over King’s decision to block a bid by Qatar Airways, a Virgin Australia strategic partner, to operate more flights into key Australian airports. King said the decision was made “in the national interest” but has since struggled to define what that is.
On Thursday morning she said another factor in her decision was the invasive strip search of five Australian women bound for Sydney on a Qatar Airways flight in October 2020. King wrote to the women on July 10, advising them she had already made her decision to reject Qatar’s bid.
During Question Time on Tuesday, Albanese said he had spoken to Virgin Australia chief executive Jayne Hrdlicka before the Qatar decision was made. But that conversation came three days after King had made her decision and the prime minister had to correct the parliamentary record.
King, for her part, fought back, accusing the Coalition of promulgating “chaos” in the aviation sector.
“They gave billions of taxpayer dollars to Qantas for nothing in return, with no strings attached. They stood by as Virgin collapsed into administration, only for it to be snatched up by foreign private equity, with a third of its workforce laid off, and it’s now seeking to sell its share. They oversaw the mass outsourcing of jobs and labour hire mess that drove down wages and conditions across the sector, which was one of the prime drivers of the same job, same pay legislation,” she said.
“They commissioned the Harris review into the Sydney Airport, only to spend almost two years sitting on it, leaving it for us to have to sort out now. They introduced an early retirement scheme for air traffic controllers – and guess what, there is now a shortage of air traffic controllers, causing airport delays up and down the country.”
On Wednesday, the Coalition attempted to move a motion of dissent in order to force a clear answer from King about whether she met with Alan Joyce before she made her decision on Qatar.
“The relationship between Mr Alan Joyce, the prime minister and this minister is well documented,” Dutton said on Wednesday.
“This is a murky situation at best. The minister’s integrity is seriously in question. The prime minister had to come back into this chamber yesterday to correct the record when he misled this parliament…
“We need to hear from this minister, in a very direct way, whether or not she met with or spoke with Alan Joyce prior to making a decision to stop Qatar flying into our country, which was of commercial benefit to Mr Joyce and to Qantas, and clearly to the detriment of the Australian flying public.”
The manager of government business in the House of Representatives, Tony Burke, called the dissent motion one of the “silliest” moments in parliament, before forcing the question to be put only so a Labor majority could then have it snuffed out.
The Nationals’ Senator Bridget McKenzie had more luck in the upper house, successfully establishing an inquiry with the support of independent senators and Pauline Hanson’s One Nation into the federal government’s handling of bilateral air service agreements over the past 12 months. As chair, she intends to call Joyce and his replacement, Vanessa Hudson, to give evidence.
Joyce’s performance at the cost-of-living inquiry late last month will serve as a warning to MPs about how to handle him.
“He’s as greasy as duck shit,” one senior MP tells The Saturday Paper. “Albo’s such a goose because this is exactly the sort of greasy, duck-shit approach that Joyce does. ‘Oh, I’ll put your son in the Chairman’s Lounge.’ I mean, fuck me dead.”
At that inquiry, Joyce professed to be unable to say precisely how much the airline still owed customers in Covid-19 flight credits, only to be hemmed in by another executive, Jetstar boss Stephanie Tully, who gave away part of the figure. Within days, Joyce was filming an embarrassing backdown, revealing that Qantas Group owed almost $600 million in credits and that they had now decided not to terminate refunds on December 31.
When the Australian Competition and Consumer Commission announced that same week it had launched a Federal Court case against the airline for continuing to sell tickets for 8000 cancelled flights between May and June last year, it was the death knell for the airline’s credibility under Joyce.
Qantas chairman Richard Goyder met with Joyce over the weekend and last Tuesday the pair told the market Joyce was retiring early, to help protect the airline.
“Alan has always had the best interests of Qantas front and centre, and today shows that,” Goyder said in a statement.
“On behalf of the board, we sincerely thank him for his leadership through some enormous challenges and for thinking well ahead on opportunities like ultra long-haul travel.”
Now, of course, the board itself faces serious questions from institutional investors about how it allowed the airline’s future prospects to be imperilled.
Labor Senator Tony Sheldon released a statement on Tuesday condemning the company’s management.
“The Qantas Board cannot hide behind Joyce’s resignation. Richard Goyder should go next,” the statement said.
“The Board has backed Joyce’s behaviour at every step and must be held equally accountable for the disgraceful state of the company.”
Few in modern politics know as much about Alan Joyce as Sheldon. When he was national secretary of the Transport Workers’ Union he made a point of speaking with Joyce regularly, even during the worst relations between Qantas and the unions.
He recalls a time when, in a Qantas Club lounge, he was speaking with two older Qantas employees who had just been sacked and then offered their same jobs on reduced pay.
“It was part-time, too, and they were crying behind the counter,” Sheldon says.
“Whenever I have a slightly weak moment with Alan, and there aren’t many of them, I just remember those two faces.”
This article was first published in the print edition of The Saturday Paper on September 9, 2023 as "Exclusive: Joyce sought to sell government a stake in Qantas".
For almost a decade, The Saturday Paper has published Australia’s leading writers and thinkers. We have pursued stories that are ignored elsewhere, covering them with sensitivity and depth. We have done this on refugee policy, on government integrity, on robo-debt, on aged care, on climate change, on the pandemic.
All our journalism is fiercely independent. It relies on the support of readers. By subscribing to The Saturday Paper, you are ensuring that we can continue to produce essential, issue-defining coverage, to dig out stories that take time, to doggedly hold to account politicians and the political class.
There are very few titles that have the freedom and the space to produce journalism like this. In a country with a concentration of media ownership unlike anything else in the world, it is vitally important. Your subscription helps make it possible.
Select your digital subscription
Letters & Editorial